Energy stocks down; Chesapeake turns lower

Chesapeake board finds no wrongdoing in CEO McClendon dealings

SAN FRANCISCO (MarketWatch) — Energy stocks fell on Wednesday, with Chesapeake Energy Corp. declining after its board of directors said it completed a review of Chief Executive Aubrey McClendon’s financial dealings and found no wrongdoing.

Shares of Chesapeake
CHK, +0.00%
initially advanced on the news but ended the day off 0.6%.

The natural-gas producer’s board of directors said a review of McClendon’s personal business deals did not find “any improper benefit” to McClendon.

Dix & Eaton

Chesapeake runs a rig in the Utica shale.

The transactions under review included deals involving EIG Global Energy Partners, trading activities of a hedge fund McClendon had co-founded, and a loan to McClendon by a board member.

McClendon, who faced stiff criticism about meshing personal and company transactions, agreed in January to retire on April 1. Chesapeake has said the decision to search for a new chief executive was not related to the review.

The company also said its board of directors concluded Chesapeake did not violate antitrust laws following the acquisition of Michigan oil and gas rights in 2010.

Chesapeake received notice of a Justice Department investigation in June and has been responding to it in addition to conducting its own investigation, the company said.

A Brazilian judge on Wednesday dropped criminal charges against Chevron Corp. and Transocean Ltd. related to a November 2011 offshore oil spill, according to media reports.

Both companies halted activities at the Frade oil well until December. Chevron is still awaiting authorization from Brazilian regulators to resume operations.

The San Ramon, Calif., company has offered $149 million to settle two civil lawsuits stemming from the spill.

Brazilian authorities had also charged 17 Chevron and Transocean employees, and the civil case sought as much as $20 billion in damages.

Shares of Transocean Ltd.
RIG, +2.09%
declined 3.5%. A federal judge in New Orleans late Tuesday approved Transocean’s $1 billion settlement with the Justice Department for the company’s role in the 2010 Deepwater Horizon explosion and oil spill.

Another federal judge last week had approved a $400 million criminal settlement. The rig operator announced the settlements in early January. Transocean owned the Deepwater Horizon rig, which exploded in April 2010, killing 11 workers and triggering the worst offshore oil spill in the U.S.

BP PLC
BP, -0.97%
which owned the Macondo well, faces a civil trial on the disaster next week, and the U.K.-based company has already paid more than $12 billion in settlement.

In a victory for BP, a judge late Tuesday ruled that the 810,000 barrels of oil recovered from the Macondo well spill should be excluded when calculating fines.

BP has maintained the oil collected directly from the leaking well should not be included in the fines under the Clean Water Act.

“While the favorable ruling on the recovered volumes is positive for BP, the government and BP still disagree over the volumes spilled,” analysts at Raymond James said in a research note.

U.S.-listed shares of BP declined 1.8%.

Royal Dutch Shell’s
RDS.A, +0.42%
top executive in Australia on Wednesday said Shell is in no rush to commit to an expansion of Chevron’s Gorgon gas export project, according to media reports.

Shell Australia Chairwoman Ann Pickard told reporters at an industry conference in Perth she has no doubts Shell will go to an expansion at Gorgon, but there’s no need to rush and the company wants to make sure it stays on track.

U.S.-listed shares of Shell were off 1.5%.

Shares of Anadarko Petroleum Corp.
APC, -0.10%
lost 4.5%. The company on Wednesday unveiled a capital expenditure budget between $7.2 billion and $7.6 billion, with 60% going to U.S. onshore projects.

Anadarko production estimates of up to 285 million oil-equivalent barrels was below analyst expectations. Given that, shares are likely to underperform in the short term, analysts at Simmons & Co. said in a note to clients.

Shares of Devon Energy Corp.
DVN, +0.71%
declined 6.6%, among the top losers on the S&P 500.

Devon earlier Wednesday reported it swung to a fourth-quarter loss of $357 million, or 89 cents a share, versus profit of $507 million, or $1.25 a share, in the year-ago period.

Excluding one-time items, the company said it posted adjusted earnings of 78 cents a share, largely within analyst expectations.

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